New Economics Papers
on Public Finance
Issue of 2005‒10‒15
four papers chosen by

  1. Nonlinear Taxation and Punishment By Andersson, Tommy
  2. Earmarking in Theory and Korean Practice By Richard M Bird; Joosung Jun
  3. Designing Optimal Taxes With a Microeconometric Model of Household Labour Supply By Rolf Aaberge; Ugo Colombino
  4. Value-Added Tax Treatment of Public Sector Bodies and Non-Profit Organizations: A Developing Country Perspective By Pierre-Pascal Gendron

  1. By: Andersson, Tommy (Department of Economics, Lund University)
    Abstract: The paper analyzes nonlinear tax schedules that are identified by maximizing a welfare function represented by a weighted summation of net utilities over a set of n>=3 differing individuals. We demonstrate that some of the feasible and Pareto efficient tax schedules that satisfy self-selection can only be identified by maximizing a welfare function of the above form if (at least) one of the individuals in the economy is assigned a negative weight.
    Keywords: Nonlinear taxation; Pareto efficiency; self-selection; welfare weights
    JEL: D82 H21
    Date: 2005–09–30
  2. By: Richard M Bird (Rotman School of Management, University of Toronto); Joosung Jun (Ehwa University)
    Abstract: In the first part of this paper we present a non-technical analysis of earmarking. We then briefly review some international experience with earmarking and its apparent results. The main new contribution of the paper is the concluding description and evaluation of the nature, efficacy, and effects of earmarking in Korea.
    Keywords: Keywords: earmarking; benefit taxation; Korea
    JEL: H29 H59
    Date: 2005–06
  3. By: Rolf Aaberge (Research Department, Statistics Norway, Oslo, Norway); Ugo Colombino (CHILD, Department of Economics, Turin, Italy)
    Abstract: This paper is concerned with the empirical analyses of optimal taxation, adopting Equality of Outcome (EO) as well as Equality of Opportunity (EOp) as evaluation criteria. The EOp- and EO-criteria provide alternative methods for summarizing the efficiency-equality trade-off in the distribution of individual welfare. We also compare the results depending on whether we use income or money-metric utility as a measure of individual welfare. We estimate micro-econometric models of household labour supply and corresponding individual welfare measures based on 1995 Norwegian data for both married couples and singles. We then use these models to simulate behavioural responses and welfare gains and losses of various constant-revenue four-parameter tax rules, i.e. the tax rules defined by a lump-sum transfer (positive or negative), two marginal tax rates and a “kink point” that produces the same revenue collected with the observed 1995 rules. Using the various EOp- and EO- critera as a basis for evaluating and comparing these tax rules, EOp- and EO-optimal tax rules are identified.
    Keywords: Optimal Taxation, Labour Supply, Microeconometric Models
    JEL: D6 D7 H
    Date: 2005–10–13
  4. By: Pierre-Pascal Gendron (The Business School, Humber Institute of Technology and Advanced Learning Toronto, Canada)
    Abstract: The application of the value-added tax to public sector bodies, non-profit organizations and charitable organizations substantially departs from full taxation in most VAT regimes around the world. The problems with the mostly exempt regime for those organizations are reviewed. Options to modify or replace the regimes are reviewed and assessed from the perspective of developing and transitional economies. The Australian-New Zealand model, where all goods and services supplied by those organizations are within the scope of the tax, emerges as the preferred option. Nevertheless, a gradualist policy may be better suited to the circumstance of many developing and transitional economies.
    Keywords: value-added tax, public sector bodies, government, non profit organizations, charitable organizations
    JEL: H24 O23
    Date: 2005–06

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